App privacy guide: App privacy regulations and privacy policy

There’s no viable and sustainable path to app growth without user consent. Stronger app privacy regulations mean consent and compliance should be a top priority for mobile application developers, publishers, and marketers to get right.

In this article, we’ll share key context and information about user consent, privacy compliance, and the regulations governing mobile app privacy.

We’ll also cover best practices for creating your mobile app privacy policy, as well as helping to ensure compliance with tracking and data processing consent requirements. Lastly, you’ll learn how the Usercentrics consent management SDK can help automate the entire process with an easy to use, highly customizable, and industry-leading solution.

The mobile application market is stronger than ever, with in-app spending set to reach USD 233 billion by 2026, according to a Sensor Tower report.

Yet many app developers and marketers feel the ground shifting, as data privacy regulations and industry changes (like Apple’s ATT) disrupt established user acquisition tactics, such as ad buying on self-attributing networks (SANs).

Data privacy regulations that require user consent for any type of personal data processing are a major cause of this disruption.

“The global landscape of data privacy regulations is increasingly stringent, with frameworks like the EU’s General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) setting the tone for what is becoming a global standard. These laws are not just legal hurdles; they represent a shift towards greater transparency and user control over personal information, which is crucial in the digital age,” says Adrienne Fischer, Founder and Attorney at Basecamp Legal.

As user consent requirements are here to stay, and noncompliance poses huge risks to the bottom line and customer base, the digital ecosystem is accepting this and adapting accordingly.

For example, Google has committed to ending third-party cookie use in Chrome, while server-side tagging is a growing alternative to third-party ad tech reliance. Additionally, more digital property owners are implementing user consent policies in compliance with laws like the EU’s General Data Protection Regulation (GDPR).

But when it comes to data privacy, the mobile application market has fallen behind, with 90% of popular apps in the EU in 2022 failing to respect user consent.

Future-proofing data strategies around user consent is vital for long-term business growth, especially for those with mobile apps.

In Liftoft’s 2024 App Marketer Survey, user privacy continues to be a top industry challenge and a pressing issue for apps. As such, user consent and data privacy are top of mind for many in the mobile app industry.

We’ll examine the data privacy regulations affecting your app and share how the Usercentrics SDK can help you automate privacy compliance and optimize consent rates via providing transparency to your users.

In short, there’s no way around data privacy compliance for any app business, and companies shouldn’t be avoiding it, especially when there are real financial benefits to privacy compliance. Here’s a quick overview of the most important regulations and their key requirements for apps.

Data privacy regulations typically address consent via one of two models: opt in and opt out. Around the world, the opt in or prior consent model is most common. The opt out model is the one currently used in state-level privacy laws in the United States.

The European Union’s General Data Protection Regulation (GDPR) is a data privacy regulation that applies to any app that collects personal data from users based in the European Union. Art. 6 GDPR outlines six possible legal bases for data processing, of which consent is the first, and Art. 7 GDPR outlines the conditions for consent to be valid.

The GDPR’s key requirement when using that legal basis — which many apps need to — is that if your app tracks personal data from EU users, you first need their consent to do so.

European data privacy regulations and guidelines (GDPR/ePD) put the responsibility of compliance on the “data controller”, i.e. the app owner/publisher.

This means that if your app processes any personal data from EU users, you are responsible for obtaining prior consent to do so. To date, as noted, many app publishers have been lax about doing so, but data protection authorities in Europe and the US have started increased enforcement in app markets.

Many third-party app SDKs track different types of data from users, like IP addresses, which are considered personal data under the EU’s GDPR). Yet these third-party providers would not be held fully responsible if users are denied their right to prior consent or data processing is otherwise done noncompliantly. That rests with you, the data controller.

Consent-based requirements in data privacy regulations that affect apps are not limited to the European Economic Area. A number of other GDPR-influenced data privacy laws have also taken effect around the world. Brazil’s General Data Protection Law (LGPD) and South Africa’s Protection of Personal Information Act (POPIA), for example, both require user consent before data processing.

For apps that collect data from EU customers, complying with cookie consent requirements is essential. Apps now need to establish a cookie policy that is transparent and informative. (While “cookies” is a term more commonly used for website tracking, apps absolutely do track users and collect data from and about their actions.)

Additionally, apps consent management should provide customizable cookie preferences, so users have the power to manage access to their data. This approach helps to ensure legal compliance, andestablishing clear and user-friendly consent mechanisms is also a critical step in respecting user privacy and securing data needed for marketing operations.

While EU data privacy laws often require users to opt in, current state-level privacy laws in the U.S. typically follow the opt-out model.

These laws allow apps to collect data in many cases without requiring user consent first, but require businesses to provide a clear and straightforward way for users to opt out or revoke their consent. This opt out can be for data collection and use, sale, sharing, targeted advertising, or profiling, depending on the law.

Every data privacy regulation is distinct and applies differently, so be sure to review the specific regulations that apply to your data handling operations and where you do business.

Broadly speaking, the world’s strongest data privacy regulations have set a standard that’s had an enormous impact on the app market, especially for app marketers.

Again, it depends somewhat on what data your app tracks/processes and where your user base is located, but online, customers can be anywhere, especially with mobile apps. So here are best practices to keep in mind when developing your app privacy compliance strategy and implementation.

Apps with users in many regions globally must collect and securely store consent from every user before processing their personal data and must provide an easy way to change their consent choice (e.g. if you have users from the EU, Brazil, or South Africa). Consent banners must enable freely given, unambiguous, explicit consent from each user. Pre-ticked checkboxes, for instance, are not allowed in most consent-based laws.

If you have users in the U.S., enable them to opt out of data processing and respect their choices. A designated link or button must make it easy for users to opt out of data collection and sharing, e.g. through a Do Not Sell Or Share My Personal Information link, as is required by the CCPA and CPRA in California.

Even for European app users who may have given consent, the GDPR requires that they be able to change or withdraw it at any time as easily as they gave it.

Provide a clear, easy to access privacy policy for full transparency into your app’s data processing, including the trackers in use, purposes of collection, method of processing, and which third parties you share this data with. This type of notification is a requirement in most data privacy laws around the world.

Mobile apps need data protection regulation compliance just like websites, and risk the same financial penalties. Heavy fines (e.g. up to EUR 20 million or up to 4 percent of annual global turnover, whichever is higher, under the EU’s GDPR) and loss of customer trust and active users are among the biggest risks for any app that doesn’t respect user consent and violates compliance.

However, with the industry moving away from third-party cookies towards server-side tagging, app companies that don’t update their data strategies for consent and compliance face additional risks.

As data privacy regulations have cemented consent as the industry paradigm, the ad tech industry is restructuring accordingly. For example, many advertisers are only buying ad space on apps that can prove valid user consent has been collected.

As dependence on third-party tracking declines across digital marketing operations, user consent is vital for establishing sustainable, data-driven marketing strategies. For apps to keep up with this change, and to capitalize on its opportunities, implementing proper and compliant consent policies must be a top priority.

For your mobile app to maintain compliance with data privacy regulations, you’ll need to create a detailed privacy policy that clearly and comprehensively details your company’s approach to user data. Here are best practices to consider when crafting your mobile app privacy policy.

• Transparency: Clearly outline in plain language:
  • types of personal data your app collects
  • how data is collected
  • purpose for its use
  • legal basis for processing
  • how long the data will be stored/retained
  • which third parties it’s shared with
    It’s common for there to be a separate document or privacy policy section that serves as a specific cookie or tracker notice.

• User rights: Detail user rights regarding their personal data, including how they can make requests to access, correct, delete, or transfer their data, if allowed under relevant data privacy law.
• Security measures: Describe the security measures in use to protect user data from unauthorized access or other breaches.
• Consent: Include how the app obtains user consent for data collection and use, especially for sensitive data (however “sensitive data” is defined under applicable regulations). Some privacy laws require specific notifications about and access to data that is categorized as sensitive by default, like that belonging to children.
• Contact information: Provide contact details for users to reach out to if they have privacy concerns, complaints, or data access requests. Under some circumstances this would need to be the data protection officer.
• Updates to policy: Inform users about changes to the privacy policy and when the last update was. Keeping the policy regularly updated is a regulatory requirement under many privacy laws.
• Compliance: Ensure the privacy policy includes relevant information like the legal basis for processing, where relevant, and other information about compliance practices, like how to change or withdraw consent, existence and use of automated decision-making (e.g. AI tools), or handling of third-party or international data transfers.

While a mobile app privacy policy can be written by anyone from scratch, doing so can be resource intensive and risks potential gaps that lead to noncompliance. Privacy policy generators can save time and provide the right level of detail, but you still need to be careful to customize it correctly for your business and relevant regulations. Consulting qualified legal counsel and/or a data privacy expert with mobile apps expertise is strongly recommended.

Mobile app publishers and marketers are all too familiar with the challenges that come with data privacy regulatory enforcement for apps. According to a Sensor Tower report, 2022 was the first year on record where app store growth slowed to a halt, with Apple’s ATT framework being seen as the biggest influence. (The ATT framework was launched and enforcement began part way through 2021.)

Some of the challenges mobile marketers face include users declining to share personal data, resulting in a loss of data for marketing needs, and more imprecise performance evaluations.

In other words, mobile app marketers may struggle with a “blindness” when it comes to creating retargeting campaigns and optimizing user experience for better retention and customer lifetime value (CLV).

Besides the challenges to user acquisition and attribution, a recent case study from Blinkist shows the steep potential consequences of an incorrect setup of consent banners.

“Contrary to the common focus on the challenges of privacy compliance, we see significant benefits. Adhering to these standards not only reduces legal risks but also signals to users that an app prioritizes their data security, fostering user trust and loyalty in a competitive market,” says Yekta Ozcomert, COO of MobileAction.co.

It’s time for a change of perspective. Consent is not an obstacle to a thriving app business, it’s a necessity and an opportunity. Increasingly, premium advertisers are requiring proof of consent to unlock desirable inventory. For apps, data privacy can be a boon to revenue growth.

Mobile marketing is trending towards outcome-based marketing, which means working backward from desired customer behaviors to build and optimize the factors that drive those behaviors. User privacy is the key factor for this strategy, as it relies on accurate behavioral and identity data.

Enhancing brand loyalty with a positive privacy experience can increase your app’s brand preference by 43 percent, according to a 2022 Google and Ipsos study. Furthermore, users are twice as likely to share their personal data with a brand they trust.

CRM and lifecycle tactics are more important than ever, with an increased focus on user retention and remarketing campaigns. The aforementioned study clearly shows that consent is key to user acquisition and retention, as it helps build customer trust, avoid fines and reputational damage, and helps ensure ongoing compliance with data privacy regulations.

In other words, prioritizing consent offers a clear competitive advantage. Those who migrate first and draw up better data strategies for their companies will profit in the long run. Google’s Consent Mode is a good example of this.

“From my perspective, the benefits of app privacy compliance are manifold. Firstly, compliance fosters trust between users and applications, which is foundational in building and maintaining a user base. Secondly, it encourages developers to design with privacy in mind, leading to more secure and user-friendly apps,” says Adrienne Fischer, Founder and Attorney at Basecamp Legal.

A privacy by design approach means consent management is integrated into the core of products. Having a robust consent solution that enables full compliance for your app is also likely to result in higher acceptance rates from users (i.e. more consent and data), in addition to other benefits. Also critically important is a consent solution that is customizable and flexible to ensure seamless user experience that doesn’t get in app users’ way.

“For instance, implementing privacy by design principles can help minimize the risk of data breaches, protecting both the user and the application from potential harm.” For app owners looking to protect user privacy, a comprehensive approach is crucial. This includes conducting regular privacy impact assessments, ensuring clear and accessible privacy policies, and implementing technical measures like encryption and anonymization to safeguard data.” Adrienne Fischer, Founder and Attorney at Basecamp Legal

However, navigating the complexities of the regulatory landscape can be difficult for mobile app developers and marketers, especially as sole proprietors or in small companies with limited resources.

This is where a consent management SDK can be easily integrated to automate the entire process.

A consent management software development kit (SDK) is a tool designed to automate data privacy compliance within apps, and simplify the process of obtaining and managing user consent. Here are a few key benefits.

Efficiency: Automating consent management significantly reduces the manual workload for developers and marketers, so they can focus on other core business activities.

Enhanced marketing: Consent management SDKs enable more effective marketing campaigns by helping to ensure that all user data used is legally obtained, in compliance with relevant privacy regulations, and, increasingly, requirements of business partners.

Fosters user trust: These SDKs increase user adoption and retention by fostering trust through transparent handling and use of their data. This is enhanced when the texts and UI are optimized for clarity and user-friendliness.

The Usercentrics Consent Management SDK is designed to address complex compliance requirements automatically, so your app can continue thriving with data protection peace of mind. Here are some key benefits:

Our SDK is designed to be ready to enable privacy compliance out of the box once you configure the CMP to your business needs and relevant regulatory requirements. Integration and maintenance efforts are minimal, just present the privacy banner when needed in your user flow, and our automated compliance technology helps take care of the rest.

We value great user experience, and for a CMP this means maximizing transparency while minimizing intrusiveness. We want users to have a seamless experience when using your app. Our SDK offers several levels of customization that will help you adapt our privacy banner to your design and messaging, as well as roll out advanced features such as Dark Mode and A/B Testing.

Thanks to our remote configuration setup and location awareness, the same SDK integration can address your privacy compliance needs whether your users are in Europe (GDPR), U.S. (CCPA/CPRA), Brazil (LGPD) or other countries with comprehensive data privacy regulations.

Whether your priority is to maximize your monetization strategy or provide a personalized experience to your users, you will need user insights. For this reason, optimizing your opt-in rates can make a vital business difference. The Usercentrics Consent Management SDK gives you robustanalytics with multiple levels of granularity, so you can track how changes to the banner influence interaction and opt-in rates.

With support for iOS, Android, Flutter, React Native, and Unity, the Usercentrics Consent Management SDK offers a flexible approach to solving data privacy compliance for mobile apps — and can be integrated with your app in less than an hour.

“A prominent part of the user experience is the ‘privacy experience’ (i.e. ATT permissions, GDPR permissions, etc.) which should also be seamlessly integrated in the journey. Having permission pop ups and banners randomly breaking your experience is becoming a no-go.”
— Valerio Sudrio, Global Director, Apps Solutions, Usercentrics

The mobile apps market is thriving, but ignoring user consent and privacy compliance continues to grow as a liability as the technology industry centers on data privacy and user engagement in response to growing regulatory coverage and the demands of influential tech platforms and business partners.

Integrating a consent management SDK on your app can help future-proof your data-driven business: boosting transparency and trust, smarter data strategies, and better remarketing campaigns.

If you want to continue leveraging user data to build high-performing campaigns, you need user consent. There’s no way around it.

The Usercentrics App CMP SDK brings industry-leading compliance technology to your app. Get in touch with one of our experts to learn more about how the Usercentrics SDK can help automate consent and compliance on your app.